THE announcement of bringing the intermediaries in the transport sector under the service tax net has been described as a step in right direction.

It would set off a long needed reforms resulting in, not only streamlining the highly fragmented business, which had escaped minimum regulatory requirement of registration of the business. This had led to a large-scale leakage of revenue to the Government.

"Now, these service providers would be registered entities with the Government and their incomes and operations would be more transparent and accountable, said a spokesman for the Indian Foundation of Transport Research and Training (IFTRT).

More than one lakh goods booking agencies, firms and contractors operating were in business as service providers in the commercial transport sector.

IFTRT said the revenue collection, as a result of the service tax on the intermediaries in the transport sector could yield an annual collection of Rs 12,000 core. However with only nine months left in the current fiscal, the actual revenue could be only Rs 3,000 to Rs 4,000 crore.